HDFC ERGO General Insurance Company has sought the insurance regulator's approval to merge with HDFC ERGO Health, following HDFC's acquisition of a nearly 51.2% stake in Apollo Munich earlier this month.
By Anwesha Ganguly
HDFC ERGO General Insurance Company, a subsidiary of Housing Development Finance Corporation (HDFC), has sought the approval of the regulator, Insurance Development Regulatory Authority of India (Irdai), to merge with HDFC ERGO Health, earlier known as Apollo Munich Health Insurance Company. The move follows HDFC’s acquisition of a nearly 51.2% stake in Apollo Munich earlier this month. The company expects to complete the merger in three-four months.
“We have now started the merger process of HDFC ERGO Health with HDFC ERGO General Insurance. Irdai’s approval has been sought for the same just recently. After Irdai’s approval, some more approvals will be required from Sebi to complete the merger process. We are hoping to complete the merger in the next three-four months,” a person aware of the developments said.
The move will reportedly require approval from the National Company Law Tribunal as well. After the merger, the new entity will be the second-largest private ensurer in the health and accident segment in India. “HDFC ERGO Health and HDFC ERGO General Insurance Company Ltd. (HDFC ERGO General) will shortly be applying to the National Company Law Tribunal (NCLT) seeking approval for the merger of HDFC ERGO Health with HDFC ERGO General. The approval from NCLT would be filed with IRDAI for their final approval for the merger,” a spokesperson from HDFC ERGO General Insurance said.
HDFC ERGO completed the transaction to acquire a majority stake in Apollo Munich Health on January 9 after receiving a go-ahead from regulatory authorities. “Subsequent to this approval (regulatory), Apollo Munich Health Insurance Co has been renamed as HDFC ERGO Health Insurance (HDFC ERGO Health) and will operate as a subsidiary of HDFC,” HDFC informed the exchanges. The transaction was valued at Rs 1,495 crore.
HDFC ERGO is a joint venture between HDFC and ERGO International AG, the insurance arm of German Munich Re Group. HDFC ERGO was the third-largest private general insurer with gross written premium of Rs 8,722 crore in FY19. It sold 84.7 lakh policies in the previous fiscal.